Rambarran, speaking yesterday at the launch of a workshop on "Countercyclical Loans for the Management of Exogenous Shocks in Small Vulnerable Economies and Non-Traditional Sources of Development Finance" at the Central Bank in Port of Spain, said while developing countries made progress in meeting the eight Millennium Development Goals (MDG) to eradicate extreme poverty, hunger, illiteracy and disease by 2015, the more vulnerable Caribbean islands still faced substantial challenges.

"As the deadline approaches, we have the opportunity to design a post-2015 framework that builds on successes, learns from past shortcomings, and addresses the gaps in the current MDGs," Rambarran said.

He said when faced with declining aid resources, many Caribbean governments resorted to the more expensive commercial borrowing to bridge funding gaps which contributed to a large public debt overhang.

Rambarran said the Caribbean had been "gradually recovering" from the shock of the global financial crisis but added that there was an "untold" element to that crisis.

"The untold story, however, is that the combined influence of these multiple shocks has led to a dramatic and fundamental shift in the composition of external financing flows to the Caribbean," he said.

He added: "It is no secret that small, vulnerable economies in the Caribbean have grappled with external shocks of varying magnitudes and duration over the past two decades.

"These shocks include a compression of aid flows, dismantling of preferential trade arrangements for sugar and bananas, interventions related to anti-money laundering and combating the financing of terrorism."